It may not be the first place you think of, but Hobart has been revealed as Australia’s least affordable city to rent, according to new data.

The Tasmanian capital has jumped further ahead of Sydney — as the least affordable city to rent — according to the latest release of the Rental Affordability Index (RAI).

According to the latest figures, even households on average incomes in Hobart are now at risk of rental stress.

“Tasmania’s capital city is in a housing gridlock,” SGS Economics and Planning’s Ellen Witte said.

“Rental affordability in Hobart dived even lower during winter.

“Working families are now facing rental stress with the average income household now paying 30 per cent of income on rent.

“This means these households are unable to save sufficiently for a deposit on a mortgage.”

Ms Witte said that in Hobart, rental stress is the everyday reality for the majority of single parents and single person households on low incomes.

WHAT IS THE RAI?

Rental affordability in Hobart dived even lower during winter.Source:Supplied

The RAI is an indicator of the price of rents relative to household incomes based on new rental agreements.

It is released biannually by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence.

A RAI of 100 and below shows that households would be required to spend at least 30 per cent of their income on rent. A RAI of 100-120 indicates households are facing moderately unaffordable rents.

Greater Hobart reached a RAI of 101 in June 2018, meaning median rents in metropolitan Hobart are now unaffordable, even to median income rental households. Greater Sydney has a RAI of 113, which is also considered moderately unaffordable.

IS THERE GOOD NEWS?

It’s not all doom and gloom however, with some good news for renters on Australia’s mainland.

Rental affordability in some Australian cities, including Sydney, has improved marginally.

In many cases, however, the gains have not flowed through to low-income households for whom affordability remains severe.

Chief Executive Officer at Community Sector Banking Andrew Cairns said rental stress is affecting the majority of very low-income households in Australia.

He said that pensioners and single parents are being hit the hardest.

WHAT’S THE NEWS FOR SYDNEY AND MELBOURNE?

Milsons Point and Kirribilli are two of Sydney’s least affordable places to rent. Picture: AAP/Paul BravenSource:AAP

Rents continue to be unaffordable even for working, median income households in Sydney and low-income households continue to be the worst off in Sydney.

“Greater Sydney is growing fast — especially in the Western Sydney City Deal area — and so is its need for social and affordable housing,” Ms Witte said.

Growing income inequality is driving demand for social and affordable housing. Western Sydney councils face a shortfall of more than 35,000 social and affordable dwellings. This will increase to 64,000 dwellings by 2036.

In Melbourne, suburbs further from the centre that previously had acceptable rents have become unaffordable in the past 12 months, including Keilor in the northwest, Gisborne in the Macedon Ranges and Diamond Creek and Warrandyte in the northeast.

The least affordable suburbs in Melbourne include Brighton East, Albert Park, Middle Park, Port Melbourne, Beaumaris and Cromer where an average income household would expect to pay 30-38 per cent of their income on rent.

IS AUSTRALIA IN A RENTAL CRISIS?

Is it a crisis?Source:Supplied

National Shelter’s Adrian Pisarski said the situation facing the nation’s renters remains poor — “with little or no improvement for low and moderate income renters in our capitals and poor affordability in our regions.”

“It is clear to National Shelter we need a National Housing Strategy to help improve the dire situation far too many renters across Australia experience.

“Compared to improvement in purchase affordability, renters are doing it tough.

Brotherhood of St Laurence’s Conny Lenneberg went one further describing it as a housing crisis.

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“There is a housing crisis in Australia and this report starkly shows those who can least afford to pay are paying the highest price,” Ms Lenneberg said.

“High rents are pushing unemployed people on very low Newstart payments into deeper poverty.

“Jobseekers are forced out to the urban fringes of our cities to find suitable accommodation but that places them far from jobs and public transport connections.

“Housing cost pressures mean some renters on Centrelink are being pushed into homelessness. “We need to raise Newstart and its very modest rental supplement as a priority.”